Hi guys,
great discussion!
As an entrepreneur who's about to start looking for angel money, all I
can say is, less crying and more doing.
We are in a privileged position here where we HAVE to focus on revenue
early in the game and create business models that actually work.
Talking to my peers in the US I get a feeling that since there is a
lot more money over there, they are a bit more chilled out about
creating viable business models that have a realistic revenue stream.
It's true that for the Twitters of this world this is the right
approach, but I believe that most businesses can generate revenue
before they create a massive user base.
Bootstrapping and squeezing out the most out of very limited resources
can be very tough, but this helps build a culture of efficiency and
sound business practices. It also brings people together and creates a
stronger sense of camaraderie. We are all in it together fighting for
the same goal and we have to trust and depend on each other as that's
all we have. If a team can survive under these Spartan conditions and
learn how to get the most out of what's available, then money will
turn it into a formidable force.
One sure way to kill a startup is having founders leave the company.
If you were an investor, wouldn't you want to know that the team you
are investing in can survive under tough conditions before you pour
your hard earned money into it?
We have to use the conditions around us to our benefit and if that
means having to jump higher and dive deeper than everyone else, than
be it. Investors will come along for a ride once they are convinced
that you can create value. More early stage investment is becoming
available and by boosting the image of Australian startups as
resilient and robust operations, we'll for sure attract more money.
Onwards and upwards I say.
Cheers,
Marko
On Sep 14, 10:41 am, "Mick Liubinskas (Pollenizer)"
<bigm...@gmail.com> wrote:
> Thanks for the post Renai. It's a good question and there are some
> great answers here.
>
> I'll summarise my point by saying yes and no.
>
> Yes, there is a VC funding here in Australia.
>
> No, it's not particularly relevant for early stage web businesses,
> which a lot of Silicon Beach is about - or is that just me?
>
> Matt's post is good as it shows where you need to be to be to get VC
> funding.
>
> So the whinging is whinging to some degree, as people read Techcrunch
> and think that VC money is how you do things. It may appear that way
> but in reality there is a a lot more companies in the valley that
> don't get VC funding than do. They are bombarded each year by
> thousands of companies from around the world and each VC may fund 3-5
> each each year.
>
> What we need to be looking at is more seed and angel funding. This is
> partly why Pollenizer is structured the way we are. We can expect big
> cash without a working business, so we find a little bit of cash, stay
> lean and get to validation.
>
> I've got no doubt the VC's in Australia will fund you - IF - you fit
> their requirements and IF you want to take the money.
>
> For some quick stats,
> * Of the more than 100 business that Pollenizer has worked with and
> more than 500 that we have spoken to, only 2 have been VC funded.
> Xumii (mid-sized project) and Mig33 (tiny project).
> * Of the $5m we have raised for our portfolio companies, none of it
> has come from VC's. Yes, it's a young portfolio and I expect some in
> the next few years will look to VC's for expansion capital, but many
> won't need it.
>
> The big part I agree with is the stop whinging and just do it. Ian
> Cummings is a good example. He finds a way. It's hard, and requires
> persistence - welcome to the job!
>
> Mick
>
> On Sep 14, 10:11 am, timparsons <tmpr...@gmail.com> wrote:
>
> > Nice post Matt - and thank heavens for Silicon Beach too I say :-)
>
> > On Sep 13, 8:26 pm, Matt <matt...@yuuwa.com.au> wrote:
>
> > > Hi Renai
>
> > > Thanks for the write up :)
>
> > > I was trying to find another early stage VC-fund investment in IT in
> > > the past 6 months and found it very difficult.
>
> > > VC funding is not particularly sought after by typical web-based start-
> > > ups these days for two key reasons:
>
> > > 1. I look to invest $1.0 - 3.0m in a Series A round, most start-ups
> > > these days can get to cashflow positive on a lot less and that's where
> > > the average entrepreneur is happy to either stop thinking about extra
> > > capital ("I am cashflow positive already") or start believing in
> > > valuations that would mean my $1-3m would not give me any substantial
> > > stake in the business.
>
> > > 2. Our terms are very very tough compared to family and friends or
> > > private equity or just about any other form of investment money. We
> > > ensure very strong downside protection, which frankly is very off-
> > > putting for many entrepreneurs
>
> > > Read VentureHacks to get an idea where VC sits in the cycle, you can
> > > get a lot from Angels if you can find them, but a VC is mean to help
> > > propel a business to the next level and should bring a lot more than
> > > cash. I have sat on both sides of the table, I don;t pretend for an
> > > instant that I can bring the networks or skills of the average Silicon
> > > Valley VC but from little ol' Perth I can certainly help a business go
> > > international for the first time.
>
> > > Agworld was an exception opportunity for us, great management, an
> > > understanding of the value of VC and some great early traction with
> > > customers built on the back of some serious sweat and real cash from
> > > the founders. Hats off to them for seeing where Yuuwa could fit in
> > > and giving us a chance
>
> > > Matt
> > > Co-founder
> > > Yuuwa Capital LP
>
> > > On Sep 13, 8:42 am, Renai LeMay <rle...@gmail.com> wrote:
>
> > > > Innovation Bay is constantly calling for people to come and pitch to
> > > > them, and now this drops out of the 'sky' -- or should that be the
> > > > 'Yuuwa'? ;)
>
> > > > Perth VC pumps $1.5m into agriculture IT
> > > > startuphttp://delimiter.com.au/2010/09/13/perth-vc-pumps-1-5m-into-agricultu...
>
> > > > I am beginning to suspect that the whinging about a lack of VC capital
> > > > in Australia is just that ... whinging.
>
> > > > Thoughts?
>
> > > > Renai
> > > > Publisher, Delimiter
>
> > > > PS I am heading to the next Innovation Bay dinner -- will be
> > > > interesting to see what the sentiment is on the issue there.
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